What Do Biggest GICS Structure Changes Mean for ETF Investors?

Since inception almost two decades ago, the Global Industry Classification System (GICS) has been the standard taxonomy employed by the financial community to sort business entities by sector and industry group.

Changes to this taxonomy, no matter how small, can have a significant impact on how companies are classified and which enterprises are included in sector index and index products developed by Standard and Poor’s and MSCI. Understanding how these changes impact company and industry groupings is therefore critical for investors with exposure to ETFs.

In January 2018, S&P Dow Jones Indices, a division of S&P Global, introduced several revisions to the GICS structure. These changes, which will be implemented after the close of business on Sept. 28, 2018, impact three specific sectors:

• Telecommunications

• Consumer discretionary

• Information technology

The MSCI Equity Indexes will reflect these changes as part of its semi-annual index review in November 2018.

Discover ETFs based on the sector of your choice from here. From here you can even explore different sector-focused ETFs based on their power rankings – a unique way to view rankings of various ETF sub-groups (eg. sectors) based on powerful metrics like three-month fund flows, average three-month return or average dividend yield.